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The Impact of Financial Development and FDI on Renewable Energy in the UAE: A Path towards Sustainable Development

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  • Ahmed Samour

    (Banking and Finance Department, Near East University, TRNC, 10 Mersin, Lefkosa 99040, Turkey)

  • M. Mine Baskaya

    (Banking and Finance Department, Near East University, TRNC, 10 Mersin, Lefkosa 99040, Turkey)

  • Turgut Tursoy

    (Banking and Finance Department, Near East University, TRNC, 10 Mersin, Lefkosa 99040, Turkey)

Abstract

Several empirical studies have explored the influence of financial development on energy consumption; however, the impact of financial development, economic growth, and FDI on renewable energy consumption ( REC ) has not been studied in the case of the UAE. For this purpose, the long and short-run interactions among economic growth, FDI , financial development, and renewable energy consumption are explored by applying the new technique of bootstrap autoregressive distributed lag, along with Granger causality analysis, in the context of the UAE for the period from 1989–2019. Using estimation techniques, the study reveals the main findings and implications for policymakers in the UAE. The present research provides significant empirical evidence that financial development, FDI , and economic growth can significantly increase renewable energy consumption in the UAE. Therefore, it is essential to promote financial development in the UAE in order to avert the financial risks that undermine the stability of the financial markets and that negatively affect the REC . Furthermore, policymakers in the UAE should promote the concept of green finance and should provide more funds for investments in green energy for sustainable energy development in the UAE.

Suggested Citation

  • Ahmed Samour & M. Mine Baskaya & Turgut Tursoy, 2022. "The Impact of Financial Development and FDI on Renewable Energy in the UAE: A Path towards Sustainable Development," Sustainability, MDPI, vol. 14(3), pages 1-14, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1208-:d:730251
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    References listed on IDEAS

    as
    1. Chun Jiang & Xiaoxin Ma, 2019. "The Impact of Financial Development on Carbon Emissions: A Global Perspective," Sustainability, MDPI, vol. 11(19), pages 1-22, September.
    2. Abdulsalam Altarhouni & Danbala Danju & Ahmed Samour, 2021. "Insurance Market Development, Energy Consumption, and Turkey’s CO 2 Emissions. New Perspectives from a Bootstrap ARDL Test," Energies, MDPI, vol. 14(23), pages 1-13, November.
    3. Mohammed Abumunshar & Mehmet Aga & Ahmed Samour, 2020. "Oil Price, Energy Consumption, and CO 2 Emissions in Turkey. New Evidence from a Bootstrap ARDL Test," Energies, MDPI, vol. 13(21), pages 1-15, October.
    4. Tehreem Fatima & Grzegorz Mentel & Buhari Doğan & Zeeshan Hashim & Umer Shahzad, 2022. "Investigating the role of export product diversification for renewable, and non-renewable energy consumption in GCC (gulf cooperation council) countries: does the Kuznets hypothesis exist?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(6), pages 8397-8417, June.
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